Natural gas prices are falling in the United States. The commodity has plummeted 19% since hitting a 13-year high earlier this month. Gas continues in short supply across Europe, with prices fluctuating. Internationally volatile coal prices, as well as domestic coal shortages in China and India, are adding fuel to the fire, as oil prices continue to rise.
Why is the US offended by price hikes?
The United States is mostly immune to rising fuel prices, as it will be the world’s greatest natural gas production in 2020, with 914.6 billion cubic meters. It is also the world’s third-largest coal producer and the world’s leading oil producer, with 19.51 million bpd, ahead of Russia and Saudi Arabia.
Because of its abundant local energy supply, the country has largely avoided being reliant on external energy sources such as Europe, India, and China. The low stockpile of natural gas, which is commonly utilized by inhabitants to heat their houses in the winter, had alarmed analysts and specialists.
With the start of the autumn season in the United States and temperatures higher than average, fears of scarcity appear to be unjustified for the time being. The US Energy Information Administration reported it got 33% more surplus natural gas for its stockpile than projected. The stockpile gap has shrunk to just 4.2 percent, continuing the weekly positive trend of surplus gas.
What does the future say?
Natural gas costs are not likely to rise dramatically this winter, as the weather forecast predicts a warmer-than-usual winter. As the cold weather sets in and heating demands grow, prices are projected to rise moderately.
Lower costs in the United States, on the other hand, will provide little respite to the rest of the world. Because European inventories are still dangerously low in many locations, European markets are projected to absorb much of the additional natural gas.
How does it affect India?
The trend in the United States will have little impact on fuel prices in India. Because the country produces the majority of its natural gas domestically and does not import from the United States, the price drop is unlikely to have an impact on domestic prices. Cooking is primarily done with natural gas in India.
Natural gas contracts in India were still under trade in the green, with very small reason to suggest that the commodity would witness a fall movement anytime in the near future.